Purpose: Ultrasound elevation beamwidth leads to image artefacts and uncertainties in localizing objects (such as a surgical needle) in ultrasound images. We examined the clinical significance of errors caused by elevation beamwidth artefacts and imaging parameters in needle insertion procedures. Method: Beveled prostate brachytherapy needles were inserted through all holes of a grid template under real-time transrectal ultrasound (TRUS) guidance. The needle tip position as indicated by the TRUS image was compared to their observed physical location. A new device was developed to measure the ultrasound elevation beamwidth. Result: Imaging parameters of the TRUS scanner have direct impact on the localization error ranging from 0.5 mm upto 4 mm. The smallest localization error was observed laterally close to the center of the grid template, and axially within the beam’s focal zone. Largest localization error occurs laterally around both sides of the grid template, and axially within the beam’s far field. we also found that the localization errors vary with both lateral and elevation offsets. Conclusion: We found properly adjusting the TRUS imaging settings to lower the ultrasound gain and power effectively minimized the appearance of elevation beamwidth artefacts and in turn reduced the localization errors of the needle tip.